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Begin New Search Topic Economics Political Geography Global Focus Content Type Working Paper Publication Year within 10 Years

101. Eternal return on capital: Nihilistic repetition in the asset economy

Author:
Amin Samman
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
What can the idea of eternal return tell us about contemporary financial society? In this essay I follow Nietzsche by deploying it as an existential provocation, linking the prospect of endless recurrence to the daily routines of the asset economy. This entails a departure from simple notions of cyclical time, typically associated with political economy and the study of economic history, in favor of a more complex view that sees recurrence and return as figures that organize and reflect the experience of life under the sign of finance. In particular, I argue that the reordering of class around the axis of asset ownership has produced two seemingly distinct structures of feeling— one based on the thrill of endless turnover and return on capital, the other on the drudgery of recurring payment schedules and debt rollovers. Though on the surface at odds with each other, both are anchored in a deeper libidinal economy associated with the asset form and ultimately nihilistic in character. The asset economy should therefore be seen as producing a very peculiar form of eternity based on the abolition of time through repetition. I conclude by foregrounding questions of culture and imagination, exploring these in connection with contemporary forms of on-demand television and the possibility of a time beyond the bad eternity of the asset economy.
Topic:
Economics, History, Capitalism, Finance, Digital Economy, Temporality, Assets, Nihilism, and Historical Imagination
Political Geography:
Global Focus

102. Transcending History’s Heavy Hand The Future in Economic Action

Author:
Jens Beckert and Timur Ergen
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper discusses sociological analyses of the formation and role of expectations in the economy. Recognition of the social constitution of expectations advances the understand- ing of economic action under conditions of uncertainty and helps to explain core features of modern capitalist societies. The range of applications of the analytical perspective is il- lustrated by closer examination of three core spheres of capitalist societies: consumption, investment, and innovation. To provide an idea of core challenges of the approach, three major research questions for the sociological analysis of expectations are presented.
Topic:
Economics, Markets, Sociology, Capitalism, and Innovation
Political Geography:
Global Focus

103. Prices, Profits, Proxies, and Production

Author:
Victor H. Aguiar, Roy Allen, and Nail Kashaev
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
This paper studies nonparametric identification and counterfactual bounds for heterogeneous firms that can be ranked in terms of productivity. Our approach works when quantities and prices are latent rendering standard approaches inapplicable. Instead, we require observation of profits or other optimizing-values such as costs or revenues, and either prices or price proxies of flexibly chosen variables. We extend classical duality results for price-taking firms to a setup with discrete heterogeneity, endogeneity, and limited variation in possibly latent prices. Finally, we show that convergence results for nonparametric estimators may be directly converted to convergence results for production sets.
Topic:
Economics, Human Capital, Profit, Productivity, and Price
Political Geography:
Canada and Global Focus

104. Child Skill Production: Accounting for Parental and Market-Based Time and Goods Investments

Author:
Elizabeth Caucutt, Lance Lochner, Joseph Mullins, and Youngmin Park
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
This paper studies the multidimensional nature of investments in children within a dynamic framework. In particular, we examine the roles of parental time investments, purchased home goods/services inputs, and market-based child care services. We first document strong increases in total investment expenditures by maternal education; yet expenditure shares, which skew heavily towards parental time, vary little with parental schooling. Second, we develop an intergenerational lifecycle model with multiple child investment inputs to study these patterns and the impacts of policies that alter the prices of different inputs. We analytically characterize investment behavior, focusing on the substitutability of different investment inputs and the way parental skills affect the productivity of family-based inputs. Third, we develop an estimation strategy that exploits intratemporal optimality conditions based on relative demand to estimate substitutability between inputs, the relative productivity of different inputs, and the role played by parental education. This approach requires no assumptions about the dynamics of skill investment, preferences, or credit markets. We also account for mismeasured inputs and wages, as well as unobserved heterogeneity in parenting skills. We further show how noisy measures of child achievement (measured several years apart) can also be incorporated in a generalized method of moments approach to additionally identify the dynamics of skill accumulation. Fourth, we use data from the Child Development Supplement of the Panel Study of Income Dynamics to estimate the skill production technology for children ages 12 and younger. Our estimates suggest complementarity between parental time and home goods/services inputs as well as between these family-based inputs and market-based child care, with elasticities of substitution ranging from 0.2 to 0.5. We find no systematic effects of parental education on the relative productivity of parental time and other home inputs. Finally, we use counterfactual simulations to explore the extent and sources of variation in investments across families, as well as investment responses to changes in input prices. We find that variation in prices explains 48% of the overall variance in investment expenditures, and differences in wages explain more than half of the investment expenditure gap between college-educated and non-college-educated parents. We further show that accounting for the degree of input complementarity implied by our estimates has important implications for the responses of individual inputs to any price change and for the responses in total investments and skill accumulation to large (but not small) price changes.
Topic:
Economics, Labor Issues, Children, Human Capital, Economic Mobility, Credit, Productivity, Skilled Labor, and Price
Political Geography:
Global Focus

105. Marriage, Children, and Labor Supply: Beliefs and Outcomes

Author:
Yifan Gong, Todd Stinebrickner, and Ralph Stinebrickner
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
While a large literature is interested in the relationship between family and labor supply outcomes, little is known about the expectations of these objects at earlier stages. We examine these expectations, taking advantage of unique data from the Berea Panel Study. In addition to characterizing expectations, starting during college, the data details outcomes for ten years after graduation. Methodological contributions come from approaches to validate quality of survey expectations data and the recognition that expectations data, along with longitudinal data, can potentially help address endogeneity issues arising in the estimation of the causal effect of family on labor supply.
Topic:
Economics, Labor Issues, Human Capital, Family, Labor Market, and Productivity
Political Geography:
Canada and Global Focus

106. Perceived and Actual Option Values of College Enrollment

Author:
Yifan Gong, Ralph Stinebrickner, and Todd Stinebrickner
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
An important feature of post-secondary schooling is the experimentation that accompanies sequential decision-making. Specifically, by entering college, a student gains the option to decide at a future time whether it is optimal to remain in college or to drop out, after resolving uncertainty that existed at entrance about factors that affect the return to college. This paper uses data from the Berea Panel Study to quantify the value of this option. The unique nature of the data allows us to make a distinction between “actual” option values and “perceived” option values and to examine the accuracy of students’ perceptions. We find that the average perceived option value is 65% smaller than the average actual option value ($8,670 versus $25,040). A further investigation suggests that this understatement is not due to misperceptions about how much uncertainty is resolved during college, but, rather, because of overoptimism at entrance about the returns to college. In terms of policy implications related to college entrance, we do not find evidence that students understate the overall value of college, which depends on the sum of the option value and expectations at entrance about the returns to college.
Topic:
Economics, Labor Issues, Human Capital, Higher Education, Economic Mobility, and Productivity
Political Geography:
Global Focus

107. Self-Employment and Development

Author:
Juan Herreno and Sergio Ocampo
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
Selection into self-employment among the poor is dominated by subsistence concerns, which leads to high levels of unproductive self-employment in developing countries. We incorporate this view into an otherwise benchmark macro-development model by allowing for labor frictions. Standard models that rely only on financial frictions are at odds with crucial features of the data, including large self-employment rates among the poor and the response of labor markets after well-identified labor demand shocks. We study the efficacy of a wide range of development policies on occupational choices, prices, and productivity. We find that providing unemployment benefits improves selection into self-employment, increasing total-factor productivity (TFP). Self-employment grants and unconditional transfers lower TFP by making self-employment more attractive to low-productivity individuals. Finally, financial reforms that improve access to credit succeed in raising productivity, but they do not address the subsistence concerns of poor individuals. Self-employment is still concentrated among the poor after the reforms take place.
Topic:
Economics, Labor Issues, Employment, Human Capital, Macroeconomics, Economic Development, and Productivity
Political Geography:
Global Focus

108. Global giants and local stars: How changes in brand ownership affect competition

Author:
Vanessa Alviarez, Keith Head, and Thierry Mayer
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4-7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU.
Topic:
Economics, International Political Economy, and Multinational Corporations
Political Geography:
United States, United Kingdom, Latin America, and Global Focus

109. MULTIPRIL: a new database on multilateral price levels and currency misalignments

Author:
Cécile Couharde, Carl Grekou, and Valérie Mignon
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper describes the new CEPII-MULTIPRIL database on Multilateral Price Levels (MPL) introduced in 2020. The MULTIPRIL database covers a wide sample of 178 countries over the 1990-2018 period, and includes relative price level series computed vis-à-vis two sets of trading partners (177 and the top 30) according to three different trade-weighting schemes. It also contains MPL-based currency misalignments series for 156 countries over the 1991-2018 period. MULTIPRIL offers the potential to improve the coverage and quality of worldwide price-competitiveness comparisons. By focusing on price level data, it usefully complements the EQCHANGE database on equilibrium exchange rates and currency misalignments derived from series in indices. Its multilateral setting provides a more comprehensive picture of relative price levels and currency misalignments compared to existing bilateral measures.
Topic:
Economics, International Political Economy, Exchange Rate Policy, Trade, Database, and Price
Political Geography:
Global Focus

110. Corporate tax avoidance and industry concentration

Author:
Farid Toubal, Mathieu Parenti, and Julien Martin
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper argues that tax avoidance by large corporations has contributed to the 25% increase in concentration among U.S. firms since the mid-1990s. Corporate tax avoidance gives large firms a competitive edge, which translates into larger market shares and an increase in the granularity of the economy. We develop IV and difference-in-differences strategies that show the causal impact of tax avoidance on firm-level sales. Had firms not resorted to tax avoidance in 2017, our results imply that the average industry concentration would have been 8.3% lower, which is around its early 2000 level.
Topic:
Economics, International Political Economy, Markets, Tax Systems, Corporations, Tax Evasion, and Corporate Tax
Political Geography:
United States and Global Focus

111. Grey Zones in Global Finance: the Distorted Geography of Cross-Border Investments

Author:
Vincent Vicard, Amélie Guillin, and Anne-Laure Delatte
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
Tax avoidance schemes generate artificially complex cross-border financial structures inflating measured international investment stocks in tax havens. Using a standard gravity framework, we estimate that about 40% of global assets (FDI, portfolio equity and debt) are `abnormal' – unexplained – stocks. Abnormal stocks are increasing over time and concentrated in a limited number of jurisdictions. Six jurisdictions including three European countries are the largest contributors: Cayman, Bermuda, Luxembourg, Hong Kong, Ireland and the Netherlands. Interestingly, the Luxleaks in 2014 do not appear to have diverted cross-border investments away.
Topic:
Economics, International Political Economy, International Trade and Finance, Finance, Borders, Investment, and Stock Markets
Political Geography:
Global Focus

112. Cross-border Investments and Uncertainty Firm-level Evidence

Author:
Rafael Cezar, Timothée Gigout, and Fabien Tripier
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper studies the impact of uncertainty on cross-border investments. We build a data-set of firm-level outward Foreign Direct Investments between 2000 and 2015. We create a time and country varying measure of uncertainty based on the dispersion of idiosyncratic investment returns. An increase in uncertainty delays cross-border flows to the affected country. Yet, this average effect hides strong heterogeneity. Firms with low ex-ante performance durably reduce their foreign investments. Meanwhile high-performing firms increase their investments after the initial shock. We interpret these results as the evidence of a cleansing effect of uncertainty shocks among multinational firms in the presence of financial frictions.
Topic:
Economics, International Political Economy, Foreign Direct Investment, Borders, and Investment
Political Geography:
Global Focus

113. Does Birthplace Diversity affect Economic Complexity? Cross-country Evidence

Author:
Dany Bahar, Hillel Rapoport, and Riccardo Turati
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We empirically investigate the relationship between a country’s economic complexity and the diversity in the birthplaces of its immigrants. Our cross-country analysis suggests that birthplace diversity is strongly and positively associated with economic complexity. This holds particularly for diversity among highly educated migrants and for countries at intermediate levels of economic complexity. The results are robust to accounting for previous trends in birthplace diversity as well as to using alternatives diversity measures. We address endogeneity concerns by instrumenting diversity through predicted stocks from a pseudo-gravity model as well as from a standard shift-share approach. Finally, we provide evidence suggesting that birthplace diversity boosts economic complexity by increasing the diversification of the host country’s export basket.
Topic:
Economics, International Political Economy, Multiculturalism, Immigrants, Diversity, and Economic Complexity
Political Geography:
Global Focus

114. Refugees’ Integration into the Austrian Labour Market: Dynamics of Occupational Mobility and Job-Skills Mismatch

Author:
Mahdi Ghodsi and Robert Stehrer
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Eight multilateral rounds of negotiations under the General Agreement on Tariffs and Trade (GATT) and international agreements under the World Trade Organisation (WTO) have contributed significantly to the reduction of tariffs among WTO members. However, over the years legitimate reasons for the imposition of non-tariff measures (NTMs) within regulations have triggered their extensive use. Among these measures, technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures allow countries to impose restrictions on the import of low-quality products suspected of harming domestic consumers’ health, plant life or the environment. Such trade policy instruments may lead to higher standards in the import market, in addition to improving market efficiency through information requirements such as mandatory labelling. This paper analyses two types of regulative and standard-like NTMs – TBTs and SPS measures – and the quality improvement of traded products that is driven by their imposition, which might be a general underlying motive for the adoption of such regulations. Based on a model framework involving both the supply and the demand side of trade and using four types of measures of these NTMs, this paper assesses the impact of TBTs and SPS measures on the quality of traded products. A dummy variable measuring the existence of these NTMs and a count variable indicating their stringency are used in the analysis. Moreover, two other variables indicate flows of NTMs imposed in each year and stocks of these NTMs accumulated over years. The results indicate that TBTs and SPS measures do indeed imply a higher quality of traded products, which is also consistent with the model when NTMs enter as a specific trade cost. Stringent TBTs with more regulations imposed in each year (i.e. flows of count TBTs) have the largest impact on the quality of traded products. However, for SPS measures only the existence of a regulation (i.e. the dummy variable on flows of SPS measures) on a traded product has the strongest impact on its quality.
Topic:
Economics, International Political Economy, International Trade and Finance, WTO, Non-Tariff Measures, and GATT
Political Geography:
Europe and Global Focus

115. Scaling Up Alternatives to Capitalism: A Social Movement Approach to Alternative Organizing (in) the Economy.

Author:
Simone Schiller-Merkens
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
In these times of crises, capitalism and the far-reaching marketization of our societies has again become a subject of contestation and critique. Alternative organizing is one response to the critique of capitalism. As an embodied and constructive form of critique it takes place in prefigurative organizations and communities on the ground that experiment with alternative forms of organizing economic exchanges and lives. These prefigurative initiatives are seen as central actors in a social transformation toward an alternative economy. However, they oftentimes remain autonomous and disconnected, questioning their potential to contribute to a broader social change. This paper sets out to explore how and when alternative organizing as practiced in communities and organizations can scale upwards to lead to a more profound social transformation of our societies. Building on insights from scholarship on social movement outcomes, I discuss the collective actions, contextual conditions, and social mechanisms that are likely to allow an upward scale shift of alternative organizing.
Topic:
Economics, Social Movement, Capitalism, and Community
Political Geography:
Global Focus

116. Modeling Myths: On the Need for Dynamic Realism in DICE and other Equilibrium Models of Global Climate Mitigation

Author:
Claudia Wieners and Michael Grubb
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We analyze and critique how optimizing Integrated Assessment Models, and specifically the widely-used DICE model, represent abatement costs. Many such models assume temporal independence –abatement costs in one period are not affected by prior abatement. We contrast this with three dimensions of dynamic realism in emitting systems: inertia, induced innovation, and path dependence. We extend the DICE model with a stylized representation of such dynamic factors. By adding a transitional cost component, we characterize the resulting system in terms of its capacity to adapt in path-dependent ways, and the transitional costs of accelerating abatement. We formalize a resulting metric of the pliability of the system, and the characteristic timescales of adjustment. With the resulting DICE-PACE model, we show that in a system with high pliability, the optimal strategy involves much higher initial investment in abatement, sustained at roughly constant levels for some decades, which generates an approximately linear abatement path and emissions declining steadily to zero. This contrasts sharply with the traditional formulation. Characteristic transition timescales of 20-40 years result in an optimum path which stabilizes global temperatures around a degree below the traditional DICE behavior; with otherwise modest assumptions, a pliable system can generate optimal scenarios within the goals of the Paris Agreement, with far lower long run combined costs of abatement and climate damages. We conclude that representing dynamic realism in such models is as important as – and far more empirically tractable than – continued debate about the monetization of climate damages and ‘social cost of carbon’.
Topic:
Climate Change, Economics, Paris Agreement, and Models
Political Geography:
Global Focus

117. Who’s Responsible Here? Establishing Legal Responsibility in the Fissured Workplace

Author:
Tanya Goldman and David Weil
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The nature of work is changing, with workers enduring increasingly precarious working conditions without any safety net. In response, this Article proposes a new “Concentric Circle framework” which would improve workers’ access to civil, labor, and employment rights. Many businesses, including app-based platforms, have restructured toward “fissured workplace” business models. They treat workers like employees (specifying behaviors and closely monitoring outcomes) but they classify workers as independent contractors (engaging them at an arms-length and cutting them off from rights and benefits tied to employment). These arrangements confound legal classifications of “employment” and expose deficiencies with existing workplace protections, which are based on “employment relationships.” As a result, a growing number of workers lack both bargaining power and critical workpalce rights and benefits. We propose a Concentric Circle framework to better govern workers’ rights in the modern era. At the core, we maintain that certain rights and protections should not be tethered to an employment relationship, but to work itself. Thus, the right to be compensated for work and paid a minimum wage; freedom from discrimination and retaliation; access to a safe working environment, and the right to associate and engage in concerted activity should belong to all workers, not just employees. Second, as a middle circle, we argue for a rebuttable presumption of employment to address those rights that remain exclusive to employees (and not independent contractors), and we propose an updated legal test of employment. Finally, at the outer ring of the framework, we suggest policies that could enhance workers’ access to benefits that promote worker mobility and social welfare. Other scholarship has focused exclusively on either independent contractors or employees, or it has proposed a new category of worker altogether. We contend that this comprehensive framework better assigns rights, responsibilities, and protections in the modern workplace than do current legal doctrines or alternative proposals.
Topic:
Economics, Labor Issues, Law, Legal Theory, Civil Rights, Legal Sector, and Workforce
Political Geography:
Global Focus

118. Firm-Level Exposure to Epidemic Diseases: Covid-19, SARS, and H1N1

Author:
Tarek A. Hassan, Stephan Hollander, Laurence van Lent, and Ahmed Tahoun
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Using tools described in our earlier work (Hassan et al., 2019, 2020), we develop text- based measures of the costs, benefits, and risks listed firms in the US and over 80 other countries associate with the spread of Covid-19 and other epidemic diseases. We identify which firms expect to gain or lose from an epidemic disease and which are most affected by the associated uncertainty as a disease spreads in a region or around the world. As Covid-19 spreads globally in the first quarter of 2020, we find that firms’ primary concerns relate to the collapse of demand, increased uncertainty, and disruption in supply chains. Other important concerns relate to capacity reductions, closures, and employee welfare. By contrast, financing concerns are mentioned relatively rarely. We also identify some firms that foresee opportunities in new or disrupted markets due to the spread of the disease. Finally, we find some evidence that firms that have experience with SARS or H1N1 have more positive expectations about their ability to deal with the coronavirus outbreak.
Topic:
Economics, Infectious Diseases, Global Markets, Finance, Pandemic, and COVID-19
Political Geography:
Global Focus

119. Foreign exchange intervention: A new database

Author:
Marcel Fratzscher, Tobias Heidland, Lukas Menkhoff, Lucio Sarno, and Maik Schmeling
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We construct a novel database of monthly foreign exchange interventions for 49 countries over up to 22 years. We build on a text classification approach that extracts information about interventions from news articles and calibrate our procedure to data about actual interventions. Our new dataset allows us to document stylized facts about the use of foreign exchange interventions for countries that neither publish their data nor make them available to researchers. Moreover, we show that foreign exchange interventions are used in a complementary way with capital controls and macroprudential regulation.
Topic:
Economics, Foreign Exchange, International Political Economy, Data, and Capital Controls
Political Geography:
Global Focus

120. Populist Leaders and the Economy

Author:
Manuel Funke, Moritz Schularick, and Christoph Trebesch
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Populism at the country level is at an all-time high, with more than 25% of nations currently governed by populists. How do economies perform under populist leaders? We build a new cross-country database identifying 50 populist presidents and prime ministers 1900-2018. We find that the economic cost of populism is high. After 15 years, GDP per capita is more than 10% lower compared to a plausible non-populist counterfactual. Rising economic nationalism and protectionism, unsustainable macroeconomic policies, and institutional decay under populist rule do lasting damage to the economy.
Topic:
Economics, Nationalism, Populism, and Economic Growth
Political Geography:
Global Focus

121. Estimating the prevalence: Properties of the estimator regarding specificity and sensitivity of the underlying test

Author:
Jens Boysen-Hogrefe and Vincent Stamer
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We provide a calculation tool to assess the properties of a maximumlikelihood (ML) estimator that extrapolates the true prevalence of an infectious disease from a random sample. The tools allow the researcher to correct for the specificity and sensitivity of the underlying medical test, calculate the standard deviation of the estimator and to plan the needed sample size. This document explains the underlying methods of the calculation tools and provides instructions for their proper use. We apply an adaption of the epidemiological SEIR-model to show that ML-estimators from random sampling tests provide a more realistic rate of infection than common approaches.
Topic:
Economics, International Political Economy, and Infectious Diseases
Political Geography:
Global Focus

122. Labor force participation, job search effort and unemployment insurance in the laboratory

Author:
Wolfgang Lechthaler and Patrick Ring
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
How the provision of unemployment benefits affects employment and unemployment is a debated issue. In this paper, we aim at complementing theoretical and empirical contributions to this debate with a laboratory experiment: We simulate a job market with search effort and labor force participation decisions while varying the maximum length of unemployment benefit eligibility. Our results reveal two separable, opposing effects: Individuals within the labor force search with lower effort when unemployment benefits are extended. However, individuals are more likely to participate in the labor force and to actively search for a job. Concerning employment, the second effect dominates so that unemployment benefits raise employment.
Topic:
Economics, International Political Economy, Markets, Labor Issues, Employment, Unemployment, and Job Creation
Political Geography:
Global Focus

123. The Impact of Corona on the World Economy

Author:
Emmanuel Navon
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Jerusalem Institute for Strategy and Security (JISS)
Abstract:
The spread of so lethal a virus on so wide a scale in so globalized an economy is unprecedented. Its impact is expected to be more ruinous than that of the 2008-2009 financial crisis.
Topic:
Economics, Public Health, Pandemic, and COVID-19
Political Geography:
Global Focus

124. Scaling Up Alternatives to Capitalism: A Social Movement Approach to Alternative Organizing (in) the Economy

Author:
Simone Schiller-Merkens
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
In these times of crises, capitalism and the far-reaching marketization of our societies has again become a subject of contestation and critique. Alternative organizing is one response to the critique of capitalism. As an embodied and constructive form of critique it takes place in prefigurative organizations and communities on the ground that experiment with alternative forms of organizing economic exchanges and lives. These prefigurative initiatives are seen as central actors in a social transformation toward an alternative economy. However, they oftentimes remain autonomous and disconnected, questioning their potential to contribute to a broader social change. This paper sets out to explore how and when alternative organizing as practiced in communities and organizations can scale upwards to lead to a more profound social transformation of our societies. Building on insights from scholarship on social movement outcomes, I discuss the collective actions, contextual conditions, and social mechanisms that are likely to allow an upward scale shift of alternative organizing.
Topic:
Economics, Social Movement, Capitalism, Marketization, Policy Diffusion, Post-Capitalism, and Prefiguration
Political Geography:
Global Focus

125. Making Basel III Work for Emerging Markets and Developing Economies

Author:
Thorsten Beck and Liliana Rojas-Suarez
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A sound financial regulatory framework is critical for minimizing the risk imposed by financial system fra­gility. In the world’s emerging markets and developing economies (EMDEs), such regulation is also essential to support economic development and poverty reduc­tion. Meanwhile, it is increasingly recognized that global financial stability is a global public good: recent decades have seen the development of new inter­national financial regulatory standards, to serve as benchmarks for gauging regulation across countries, facilitate cooperation among financial supervisors from different countries, and create a level playing field for financial institutions wherever they operate. For the worldwide banking industry, the international regulatory standards promulgated by the Basel Com­mittee on Banking Supervision (BCBS) stand out for their wide-ranging scope and detail. Even though the latest Basel recommendations, adopted in late 2017 and known as Basel III, are, like their predecessors, calibrated primarily for advanced countries, many EMDEs are in the process of adopting and adapting them, and many others are considering it. They do so because they see it as in their long-term interest, but at the same time the new standards pose for them new risks and challenges. This report assesses the implica­tions of Basel III for EMDEs and provides recommen­dations for both international and local policymakers to make Basel III work for these economies.
Topic:
Development, Economics, Emerging Markets, and Markets
Political Geography:
Global Focus

126. Automation and a Changing Economy: The Case for Action

Author:
Alastair Fitzpayne, Conor Mckay, and Ethan Pollack
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
Technology fuels our economy, captures our collective imaginations, and promises extraordinary possibilities. It permeates almost all aspects of our lives. From electrification and the internal combustion engine, to search engines and smartphones, technology has changed how we travel, access information, buy products, and communicate with each other. As technology changes our personal lives, it also changes work. For generations, economic change has replaced products, jobs, and industries with innovative new models. The American economy has transitioned from agrarian to industrial, service to digital, and with each evolution, America has prospered even as it grappled with the profound challenges of change. The American ideal embraces the promise that economic progress can create an inclusive society in which prosperity is broadly shared. Work is more than simply a way to earn a living. It gives structure, dignity, and purpose to our lives. For this reason, workers should not be treated as a cost of doing business but recognized for their productivity and creativity. For too many Americans, the promise of work is not being kept. New technologies are creating great wealth for some, but we are simultaneously experiencing historic income and wealth inequality. Without robust policies and strong institutions, new innovations risk exacerbating the economic insecurity and political and civil divides that we are experiencing today. Emerging technologies, including artificial intelligence, machine learning, and advanced robotics, have the potential to automate many tasks currently performed by workers. Historically, automation has been an important ingredient driving economic growth and progress. Automation has enabled us to feed a growing population while allowing workers to transition from subsistence farming to new forms of work. Automation helped move us from a craft system to mass production, from blue-collar to white-collar to “new-collar” work—with better work, higher wages, more jobs, and better living standards. Similar to past innovations, these new technologies offer the potential to help us meet human needs while supporting new jobs and industries never before imagined. However, automation can also have negative effects on individuals and communities. Those who lose their jobs suffer economic, social, and psychological hardship. Communities that relied on single industries that have been automated have struggled to recover. New jobs are being created, but their geographic distribution and skill requirements often make them inaccessible to the individuals and the communities where those whose jobs were lost. This dislocation has played a role in exacerbating America’s economic, political, geographic, and social divides. The answer to the dislocations that can result from automation should not be to stifle innovation. Policies and reforms should encourage both the development of new technologies and the promise of work. Workers need access to the opportunities technology creates. Policymakers and employers can help by providing access to skills training, ensuring the availability of good jobs, and improving the systems that are in place to help those who will transition from declining to growing occupations. While there are many unanswered questions about what the future holds, this report attempts to explain how automation impacts the labor market and how to better prepare American workers to benefit from the changes to come.
Topic:
Economics, Science and Technology, Labor Issues, Automation, and Job Creation
Political Geography:
Global Focus

127. The Political Economy of Europe since 1945: A Kaleckian perspective

Author:
Joseph Halevi
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes the early stages of the formation of the Common Market. The period covered runs from the end of WW2 to 1959, which is the year in which the European Payments Union ceased to operate. The essay begins by highlighting the differences between the prewar political economy of Europe and the new dimensions and institutions brought in by the United States after 1945. It focuses on the marginalization of Britain and on the relaunching of French great power ambitions and how the latter determined, in a very problematical way, the European complexion of France. Because of France’s imperial aspirations, France, not West Germany, emerged as the politically crisis prone country of Europe acting as a factor of instability thereby jeopardizing the process of European integration, Among the large European nations, Germany and Italy appear, for opposite economic reasons, as the countries most focused on furthering integration. Germany expressed the strongest form of neomercantilism while Italy the weakest.
Topic:
Economics, Political Economy, Global Political Economy, World War II, and Common Market
Political Geography:
United States, Europe, Germany, and Global Focus

128. From the EMS to the EMU and...to China

Author:
Joseph Halevi
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The paper highlights the position of German authorities, showing that they were quite lucid about the fundamental weaknesses inherent in a process that separated monetary from fiscal policies by giving priority to the centralization of the former. Instead of repeating the well known critiques levelled against the EMU – for which readers are referred to the unsurpassed treatment by Stiglitz, the essay highlights the splintering of Europe in the way in which it has unfolded during the 1990s and in the first decade of the present millennium. In particular the early economic and political origins of the terminal crisis of Italy are located between the late 1980s and the 1990s. France is shown to belong increasingly to the so-called European periphery by virtue of a weakening industrial structure and persistent balance of payments deficits. The paper argues that France regains its central role by political means and through its weight as an active nuclear military power centered on maintaining its imperial interests and posture especially in Africa. The first decade of the present millennium is portrayed as the period in which a distinct German economic area had been formed in the midst of Europe with a strong drive to the east with an increasingly powerful gravitational pull towards the People’s Republic of China.
Topic:
Economics, International Political Economy, Political Economy, History, and Macroeconomics
Political Geography:
Africa, China, Europe, Asia, Germany, and Global Focus

129. Macroeconomic Management Meets the New Economy

Author:
Commission on Global Economic Transformation
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Finance and the macroeconomy, both policy and industry practices as well as academic research, have evolved substantially in recent years. While the old questions of business cycles, macroeconomic management, financial regulation, and social protection are still being debated, we are now confronted with new developments in the economy, characterized by digital technology, new modes of production and business models, and changing employment relations. Macroeconomics and finance need urgent rethinking as the global economy transforms. Our gathering on March 5, 2019 brought together economists, policymakers, financial regulators, and industry practitioners from around the world. We heard diverse perspectives on multilateralism, pension and labor market reform, international trade, and risks in the world economy, and we grappled with issues on stagnant wages, public debt, fiscal and monetary policy, and banking reforms. Our discussion was by no means exhaustive or conclusive, but we attempted to harness the group’s collective wisdom to address some of the most prominent questions of our day. This document is intended to inform our commissioners as they develop CGET’s final report and to share our timely conversation with policymakers and the general public. Fomenting multidisciplinary, critical discourse is one of the most important responsibilities of this initiative, and we sincerely thank the staff at the Institute for New Economic Thinking (INET), our dedicated Commissioners, and our outside experts for helping us to promote this dialogue.
Topic:
Economics, Industrial Policy, Regulation, Digital Economy, Economic Theory, and Macroeconomics
Political Geography:
United States and Global Focus

130. Demand-determined potential output: a revision and update of Okun’s original method

Author:
Claudia Fontanari, Antonella Palumbo, and Chiara Salvatori
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper challenges the mainstream view of potential output, and enquires into the supposed effects of Great Recession on potential growth. We identify in the demand-led growth perspective a more promising theoretical framework both to define the notion and to gauge the long-term effects of a demand slow down. Based on the poor reliability of standard estimates of potential output, we also propose an alternative calculation. This is based on an update of Arthur M. Okun’s original method for estimating potential output, which, differently from the estimation methods currently in use, does not rely on the notion of NAIRU, thus being immune to its theoretical and empirical shortcomings. Our calculation, based on a re-estimation of Okun’s Law on US quarterly data, shows both how far an economy generally operates from its production possibilities, and how much potential growth is affected by the actual growth of demand over time. These wide margins for expansion of actual and potential output growth imply that a determined policy of demand expansion would create, given time, the very capacity that justifies it.
Topic:
Economics, Global Recession, Economic Growth, Macroeconomics, and Demand
Political Geography:
United States and Global Focus

131. Technological Disruption in the Global Economy

Author:
Commission on Global Economic Transformation
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Technology has become the most powerful disruptive force in our economy. It bears on the future of work, competition, market power, and national security, and it binds the other major areas of our commission’s investigation: macroeconomics and finance, globalization, and climate change. In essence, technological progress propels global economic transformation. Our gathering on February 6, 2019 brought economists together with leading voices from academia, labor, private industry, and the nonprofit/NGO sector. We heard from industry leaders with deep roots and history in the Silicon Valley technology revolution, academics who have also spent time in the policy arena, and from individuals who are already considering new models and approaches to digital rights and the future of work. Our discussion was by no means exhaustive or conclusive, but we attempted to harness the group’s collective wisdom to address some of the most vexing questions of our day. This document is intended to inform our commissioners as they develop CGET’s final report and to share our timely conversation with policymakers and the general public. Fomenting multidisciplinary, critical discourse is one of the most important responsibilities of this initiative, and we sincerely thank the staff at the Institute for New Economic Thinking (INET), our dedicated commissioners, and our outside thought leaders for helping us to promote this dialogue.
Topic:
Economics, Science and Technology, Global Markets, Digital Economy, Global Political Economy, and Macroeconomics
Political Geography:
United States and Global Focus

132. Estimates of the Natural Rate of Interest and the Stance of Monetary Policies: A Critical Assessment

Author:
Enrico Sergio Levrero
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
After briefly mentioning the determinants of the natural rate of interest in the New Keynesian models, the paper discusses the different notions of it that we find in these models and the problems encountered when the natural rate is estimated. It states that these problems are not only related to the difficulties in distinguishing the kind and persistency of economic shocks, but pertain to theory, namely to model specification and the alleged independence of the average or normal interest rate from monetary policy. Following Keynes’s suggestion regarding the monetary nature of interest rates, some final remarks will thus be advanced on their effects on prices and income distribution as well as on the objectives and stance of monetary policies.
Topic:
Economics, Monetary Policy, Income Inequality, Macroeconomics, and Keynes
Political Geography:
United States and Global Focus

133. Cross-Border E-Commerce: WTO discussions and multi-stakeholder roles – stocktaking and practical ways forward

Author:
Michael Kende1 and Nivedita Sen
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
E-commerce has long been recognized as a driver of growth of the digital economy, with the potential to promote economic development. The benefits come from lower transaction costs online, increased efficiency, and access to new markets. The smallest of vendors can join online marketplaces to increase their sales, while larger companies can use the Internet to join global value chains (GVCs), and the largest e-commerce providers are now among the most valuable companies in the world.
Topic:
Development, Economics, Science and Technology, World Trade Organization, Digital Economy, Economic Growth, and Free Trade
Political Geography:
United States, Europe, Switzerland, and Global Focus

134. The Evolution and Current Status of De Facto Stare Decisis in International Trade and Investment Tribunals: How to Understand the Present by Looking into the Past

Author:
Chanya Punyakumpol
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Is there a doctrine of 'stare decisis' in international trade and international investment law? From a positive law perspective, the answer is a definite no. However, as many scholars have observed, in practice, there has been a strong level of deference from the Appellate Body to its previous rulings, but less so from investment tribunals. Using social network analysis to assess actual citations from the Appellate Body Reports and investment arbitrations from the inception to the current time, this paper examines the evolution and 'status quo' of citation networks in international trade and international investment arbitrations. It asks, not only whether there is a 'de facto' rule of precedent in the two regimes, but also when it occurs and how the development links with the institutional design of dispute settlement. The results show how the doctrine of 'stare decisis' diverges in international trade and international investment, as well as the importance of institutional design in shaping and constraining the behaviors of tribunals.
Topic:
Economics, Globalization, International Trade and Finance, Law, Finance, and Global Political Economy
Political Geography:
Global Focus

135. Tax Audits as Scarecrows: Evidence from a Large-Scale Field Experiment

Author:
Ricardo Perez Truglia, Matias Giaccobasso, Guillermo Cruces, Rodrigo Ceni, and Marcelo Bergolo
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
The canonical model of Allingham and Sandmo (1972) predicts that firms evade taxes by optimally trading off between the costs and benefits of evasion. However, there is no direct evidence that firms react to audits in this way. We conducted a large-scale field experiment in collaboration with Uruguay’s tax authority to address this question. We sent letters to 20,440 small- and medium-sized firms that collectively paid more than 200 million dollars in taxes per year. Our letters provided exogenous yet nondeceptive signals about key inputs for their evasion decisions, such as audit probabilities and penalty rates. We measured the effect of these signals on their subsequent perceptions about the auditing process, based on survey data, as well as on the actual taxes paid, based on administrative data. We find that providing information about audits had a significant effect on tax compliance but in a manner that was inconsistent with Allingham and Sandmo (1972). Our findings are consistent with an alternative model, risk-as-feelings, in which messages about audits generate fear and induce probability neglect. According to this model, audits may deter tax evasion in the same way that scarecrows frighten off birds.
Topic:
Economics, Global Political Economy, Tax Systems, Economic Policy, and Macroeconomics
Political Geography:
United States, Argentina, and Global Focus

136. Construction of an Extended Environmental and Economic Social Accounting Matrix from a Practitioner’s Perspective

Author:
Onil Banerjee, Martin Cicowiez, Renato Vargas, and Mark Horridge
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
In 2014, the United Nations published the first International Standard for environmental economic statistics, known as the System of Environmental-Economic Accounting (SEEA).. As more countries adopt and implement the SEEA, the availability of consistent environmental and economic information increases the need for analytical tools that can use this data to respond to policy relevant questions. In this paper, we present a workflow to develop an environmentally extended social accounting matrix, which can serve as the basic database for the development of environmentally-extended computable general equilibrium models. To illustrate, and given its comprehensive implementation of the SEEA, we apply this workflow to the Guatemalan case and the Integrated Economic-Environmental Modeling (IEEM) Platform.
Topic:
Economics, United Nations, Basic Data, Accountability, Economic Policy, and Statistics
Political Geography:
South America, Latin America, Central America, Guatemala, and Global Focus

137. Post-Truth: An Alumni Economist's Perspective

Author:
Ben Fine
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
Drawing upon fifty years as an academic economist, this lecture to alumni of SOAS’s Department of Economics reflects upon the continual “post-truth” aspects of mainstream economics, ranging over its substantive, if shifting, content, its methodology, and its treatment of methodology and interdisciplinarity. It draws upon a wide range of theory, empirical analysis, policy and anecdote to highlight both the need for alternatives and the continuing, even increased, failure of the mainstream to engage with criticism and alternatives.
Topic:
Economics, Imperialism, Economic Theory, and Economic Cooperation
Political Geography:
Global Focus

138. Labor Institutions and Development Under Globalization

Author:
Servaas Storm and Jeronim Capaldo
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Labor market regulation is a controversial area of public policy in both developed and developing countries. After decades of de-regulatory advice, international financial institutions have recently come to a less extreme position. But any concessions to labor regulation are based on concerns for social stability or for short-term support to aggregate demand, while regulation continues to be viewed as harmful to economic efficiency. In this paper we take a deeper look at the impact of labor institutions on economic development in two ways. First, we propose a macroeconomic model with balance-of-payments constraint for a “small” developing country open to trade and foreign capital. This helps us clarify the importance of a dynamic view of economic efficiency, as opposed to the static view embedded in mainstream policy advice. Secondly, we discuss the political economy of labor regulation. We argue that labor institutions promote economic development though positive effects on aggregate demand, labor productivity and technology.
Topic:
Economics, Labor Issues, Regulation, Labor Market, and Labor Cost
Political Geography:
Global Focus

139. Resource Sovereignty: The Agenda for Africa’s Exit from the State Plunder

Author:
Tricontinental: Institute for Social Research
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Tricontinental: Institute for Social Research
Abstract:
The modern global economy, essentially guarantees the continued expatriation of profits and natural assets from resource-rich but capital-poor countries, facilitating the enrichment of the global economic elite and Multinational Corporations (MNC), at the expense of developing countries. To elaborate on the themes of corporate plunder, resource nationalism and people-centered forms of resource management, Tricontinental: Institute for Social Research spoke with Gyekye Tanoh, head of the Political Economy Unit at the Third World Network-Africa based in Accra (Ghana).
Topic:
Economics, Globalization, Natural Resources, Multinational Corporations, and Profit
Political Geography:
Global Focus

140. Data Is a Development Issue

Author:
Susan Ariel Aaronson
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Many wealthy states are transitioning to a new economy built on data. Individuals and firms in these states have expertise in using data to create new goods and services as well as in how to use data to solve complex problems. Other states may be rich in data but do not yet see their citizens’ personal data or their public data as an asset. Most states are learning how to govern and maintain trust in the data-driven economy; however, many developing countries are not well positioned to govern data in a way that encourages development. Meanwhile, some 76 countries are developing rules and exceptions to the rules governing cross-border data flows as part of new negotiations on e-commerce. This paper uses a wide range of metrics to show that most developing and middle-income countries are not ready or able to provide an environment where their citizens’ personal data is protected and where public data is open and readily accessible. Not surprisingly, greater wealth is associated with better scores on all the metrics. Yet, many industrialized countries are also struggling to govern the many different types and uses of data. The paper argues that data governance will be essential to development, and that donor nations have a responsibility to work with developing countries to improve their data governance.
Topic:
Development, Economics, Governance, and Data
Political Geography:
Global Focus

141. Emerging Countries in Global Financial Regulatory Standard Setting: What Is to Be Done?

Author:
Andrew Walter
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper explores the role of emerging-country members in the Basel process, a key aspect of the global financial standard-setting process. It argues that this process has been significantly more politically resilient than adjacent aspects of global economic governance, in part because major emerging countries obtain continuing “intra-club” benefits from participation within it. The most important of these are learning benefits, but status and sometimes influence over standard-setting outcomes can also be valuable. The paper outlines how these benefits could be enhanced to secure the ongoing resilience of global financial regulatory governance. It recommends some modest reforms to further improve the position of emerging countries in the process and to bolster its perceived legitimacy among members and non-member countries.
Topic:
Economics, International Trade and Finance, Governance, and Regulation
Political Geography:
Global Focus

142. Should Monetary Policy Take Inequality and Climate Change into Account?

Author:
Patrick Honohan
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Should central banks take more account of ethical issues, notably the impact of monetary policy actions on the distribution of income and wealth and on efforts to combat climate change, in the design and implementation of the wider monetary policy toolkit they have been using in the past decade? Although the scope to influence a range of objectives is more limited than is often supposed, and while it is vital to not derail monetary policy from its core purposes, central bank mandates justify paying more attention to such broad issues, especially if policy choices have a significant potential impact. Carefully managed steps in this direction could actually strengthen central bank independence while making some contribution to improving the effectiveness of public policy on these issues.
Topic:
Climate Change, Economics, Monetary Policy, Inequality, and Central Bank
Political Geography:
North America, Global Focus, and United States of America

143. Creating a Euro Area Safe Asset without Mutualizing Risk (Much)

Author:
Alvaro Leandro and Jeromin Zettelmeyer
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper explains and evaluates three proposals to create “safe assets” for the euro area based on sovereign bonds, in which sovereign risk is limited through diversification and some form of seniority. These assets would be held by banks and other financial institutions, replacing concentrated exposures to their own sovereigns. The paper focuses on three ideas: (1) to create multitranche “sovereign bond-backed securities” (SBBS), of which the senior tranche would constitute a safe asset; (2) to create a senior, publicly owned financial intermediary that would issue a bond backed by a diversified portfolio of sovereign loans (“E-bonds”); and (3) to issue sovereign bonds in several tranches and induce banks to hold a diversified pool of senior sovereign bonds (“multitranche national bond issuance”). Public attention (including public criticism) has so far focused on the first idea; the other two have not yet been seriously debated. The authors find that none of the competing proposals entirely dominates the others. SBBS do not deserve most of the criticism to which they have been subjected. At the same time, E-bonds and multitranche national bond issuance have several interesting features—including inducing fiscal discipline—and warrant further exploration.
Topic:
Economics, Sovereign Wealth Funds, Banks, and Risk
Political Geography:
Europe and Global Focus

144. Measuring the Rise of Economic Nationalism

Author:
Monica de Bolle and Jeromin Zettelmeyer
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Since the mid-2000s, the platforms of major political parties in both advanced and emerging-market economies have increasingly emphasized policies that stress national sovereignty, reject multilateralism, and seek to advance national interests through measures that come at the expense of foreign interests. This paper documents this shift by evaluating the policy platforms of the largest political parties (about 55 in total) in the Group of Twenty (G-20) countries with regard to trade policy, foreign direct investment (FDI), immigration, and multilateral organizations. Preference shifts with respect to industrial policy, competition policy, and macroeconomic populism are also examined. In advanced economies, the biggest shifts were toward restrictions on immigration and trade and toward macroeconomic populism. In emerging-market economies, the largest preference shifts were toward industrial policies favoring specific sectors, macroeconomic populism, and industrial concentration. Trade protectionism and skepticism toward multilateral organizations and agreements have increased in both advanced and emerging-market economies. As of 2018, economic policy preferences in emerging-market economies were more nationalist and less liberal than in advanced countries, but the gap has narrowed. Right-wing parties tend to be more nationalist than left-wing parties in the areas of immigration restrictions, FDI restrictions, and antimultilateralism, but there is no significant difference with respect to trade protectionism.
Topic:
Economics, International Trade and Finance, Nationalism, Politics, Populism, and Macroeconomics
Political Geography:
Global Focus

145. Does Trade Reform Promote Economic Growth? A Review of Recent Evidence

Author:
Douglas A. Irwin
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Do trade reforms that significantly reduce import barriers lead to faster economic growth? In the two decades since the critical survey of empirical work on this question by Francesco Rodriguez and Dani Rodrik in 2000, new research has tried to overcome the various methodological problems that have plagued previous attempts to provide a convincing answer. This paper examines three strands of recent work on this issue: cross-country regressions focusing on within-country growth, synthetic control methods on specific reform episodes, and empirical country studies looking at the channels through which lower trade barriers may increase productivity. A consistent finding is that trade reforms that significantly reduce import barriers have a positive impact on economic growth, on average, although the effect differs across countries. Overall, these research findings should temper some of the previous agnosticism about the empirical link between trade reform and economic performance.
Topic:
Economics, Reform, Economic Growth, and Trade
Political Geography:
Global Focus

146. Public and Private Pension Systems and Macroeconomic Volatility in OECD Countries

Author:
Mario Holzner, Stefan Jestl, and David Pichler
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper analyses the impact of public pension expenditures and pension funds’ assets as well as their benefits on economic volatility. To do so, we use panel data for 35 OECD countries for the period 1980-2018 and apply a set of state-of-the-art econometric estimators. Our results show weak evidence of a negative impact of public pension expenditures as well as weak evidence of a positive impact of pension funds’ benefits on volatility. Results were, however, found not to be very robust. In contrast, pension funds’ assets do not show any evidence of being associated with economic volatility. Unsystematic fiscal policy, banking crises and political (in)stability, however, are revealed to be somewhat more robust determinants of economic volatility.
Topic:
Economics, Public Sector, Econometrics, and Organisation for Economic Co-operation and Development
Political Geography:
Global Focus

147. Uncertain Futures Imaginaries, Narratives, and Calculative Technologies

Author:
Jens Beckert and Richard Bronk
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Dynamic capitalist economies are characterised by relentless innovation and novelty and hence exhibit an indeterminacy that cannot be reduced to measurable risk. How then do economic actors form expectations and decide how to act despite this uncertainty? This pa­ per focuses on the role played by imaginaries, narratives, and calculative technologies, and argues that the market impact of shared calculation devices, social narratives, and contin­ gent imaginaries underlines the rationale for a new form of ‘narrative economics’ and a the­ ory of fictional (rather than rational) expectations. When expectations cannot be anchored in objective probability functions, the future belongs to those with the market, political, or rhetorical power to make their models or stories count. The paper also explores the dangers of analytical monocultures and the discourse of best practice in conditions of uncertainty, and considers the link between uncertainty and some aspects of populism.
Topic:
Economics, Science and Technology, Capitalism, and Innovation
Political Geography:
Global Focus

148. Product-Level Trade Elasticities

Author:
Lionel Fontagné, Houssein Guimbard, and Gianluca Orefice
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
Trade elasticity is a crucial parameter in evaluating the welfare impacts of trade liberalization. We estimate trade elasticities at the product level (6-digit of the Harmonized System comprising more than 5,000 product categories) by exploiting the variation in bilateral applied tariffs for each product category for the universe of available country pairs. This is done by constructing a panel of bilateral applied tariffs and bilateral trade covering the period 2001 to 2016. We address potential endogeneity issues as well as heteroskedasticity and selection bias due to zero flows. The obtained trade elasticities are centered around -5. We finally highlight the differences in the gains from trade arising from considering heterogeneous rather than average trade elasticities. All product level elasticities are made publicly available for sake of scrutiny and use by other researchers.
Topic:
Economics, International Political Economy, Bilateral Relations, Tariffs, Trade Liberalization, and Trade
Political Geography:
Global Focus

149. Are Your Labor Shares Set in Beijing? The View through the Lens of Global Value Chains

Author:
Ariell Reshef and Gianluca Santoni
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We study the evolution of labor shares in 1995-2014 while taking into account international trade based on value added concepts. On average, the decline in labor shares (starting around 1980) accelerates in 2001-2007, after which labor shares recover somewhat. In contrast, skilled labor shares consistently increase. The acceleration in the decline in labor shares is associated with increased intensity of intermediate input exporting; this manifests in a sharp increase in the foreign component in upstreamness of industries and countries in global value chains (GVCs). China's global integration accounts for much of this. Declines in the price of investment together with capital-skill complementarity can explain both the consistent increase in skilled labor shares and the reversal of trend in overall labor shares. Compared to shares in GDP, labor shares in gross national product (GNP) are higher in countries with positive net FDI positions; the uneven spread of multinational activity contributes to greater inequality through this channel.
Topic:
Economics, International Political Economy, International Trade and Finance, Labor Issues, Trade, Global Value Chains, and Skilled Labor
Political Geography:
China and Global Focus

150. Migrant Inventors and the Technological Advantage of Nations

Author:
Hillel Rapoport, Prithwiraj Choudhury, and Dany Bahar
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We investigate the relationship between the presence of migrant inventors and the dynamics of innovation in the migrants’ receiving countries. We find that countries are 25 to 50 percent more likely to gain advantage in patenting in certain technologies given a twofold increase in the number of foreign inventors from other nations that specialize in those same technologies. For the average country in our sample this number corresponds to only 25 inventors and a standard deviation of 135. We deal with endogeneity concerns by using historical migration networks to instrument for stocks of migrant inventors. Our results generalize the evidence of previous studies that show how migrant inventors "import" knowledge from their home countries which translate into higher patenting. We complement our results with micro-evidence showing that migrant inventors are more prevalent in the first bulk of patents of a country in a given technology, as compared to patents filed at later stages. We interpret these results as tangible evidence of migrants facilitating the technology-specific diffusion of knowledge across nations.
Topic:
Economics, International Political Economy, Migration, Science and Technology, Migrant Workers, and Knowledge Economy
Political Geography:
Global Focus